Public liability answers for harm done by what you DO. Product liability answers for harm done by what you SUPPLY, after it has left your hands and often long after. The two are sold together so routinely that people treat them as one cover, and the distinction matters the moment a business sells, fits or applies anything at all, because the law makes a supplier answerable for a defective product whether or not it made it.
Why a supplier is liable for somebody else's product
Part I of the Consumer Protection Act 1987 imposes liability for damage caused by a defective product on the producer, on anybody who holds themselves out as the producer by putting their name on it, and on the supplier who cannot identify who supplied it to them. That last limb is the one small businesses meet: a retailer or installer who cannot say where a product came from can end up defending the claim itself. Keeping supplier records is the cheapest risk control there is.
Who needs product liability, beyond the obvious
Shops and manufacturers know they need it. So do salons that apply products, tradespeople who fit materials, caterers who serve food, and anybody who imports goods into the United Kingdom, because an importer is treated as a producer. Fitting somebody else's boiler, applying somebody else's hair colour and selling somebody else's supplement all bring the section into play.
How the cover behaves
Product liability is usually written on the same policy and the same limit as public liability, and it responds to injury or property damage caused by the product rather than to the cost of the product itself. It does not pay to recall or replace defective stock, which is a separate product recall cover, and it does not answer for a product that simply did not work, which is a contract dispute rather than a liability claim.
What a business should check on the schedule
Three things: that product liability is actually included and not an optional extra left off the quote, that the limit is the same as the public liability limit rather than a lower inner one, and that the territorial limits cover where the goods end up. Exports to North America are frequently excluded or separately rated, and that exclusion is easy to miss on a business that sells online.
Questions people ask about public and product liability insurance
What is the difference between public and product liability?
Public liability answers for injury or damage caused by your business activities. Product liability answers for injury or damage caused by goods you supplied, after they have left you. Most businesses that sell or fit anything need both, and they are usually on one schedule.
Do I need product liability if I did not make the product?
Often yes. The Consumer Protection Act 1987 makes a supplier liable where they cannot identify who supplied the product to them, and treats an importer into the United Kingdom as a producer. Retailers, installers and importers are all exposed.
Does product liability cover a recall?
No. It answers for injury and damage the product causes. The cost of recalling, replacing or reworking stock is product recall or product guarantee cover, which is bought separately and is priced differently.
Is product liability included as standard?
On most small business packages it is included at the same limit as public liability, but not always, and some policies carry a lower inner limit or exclude sales to North America. Check the schedule rather than the quote summary.